Thursday 23rd October: Daily technical outlook and review.

[jamiesocial]

EUR/USD:

Weekly Timeframe: The weekly timeframe shows that price is currently heading south, as selling interest came into the market around the 1.28393 level, just below a strong-looking weekly supply area seen at 1.29941-1.28583.

Daily Timeframe: The Euro continues to lose ground as prices took yet another tumble yesterday. This consequently saw the small daily decision-point level seen at 1.26545 consumed, and as a result the path south now looks relatively clear down to a daily demand area coming in at 1.24642-1.25616.

4hr Timeframe: The 4hr timeframe shows that price is currently trading around a fresh 4hr demand area at 1.26236-1.26469; however we must say, things do not look very promising here for the buyers at the moment. Below this area shows that other than the 1.26 level, most of the demand to the left has already likely been consumed. So, assuming that this area of demand is broken, then there is a strong possibility a sell off could be seen down to around a 4hr Quasimodo level seen at 1.25699 (active buy orders are seen just above at 1.25744). What also makes this level more appealing is the fact that it’s sitting just above the daily demand area seen at 1.24642-1.25616.

With the above being said, we have to also be prepared for active buyers to come into the market around the current aforementioned 4hr demand area. If that is the case, then we feel there is a good chance price could rally up to at least the 1.27 level, as there appears to be very little selling opposition/supply above.

Buy/sell levels:

Buy orders: 1.25744 (Predicative stop-loss orders seen at: 1.25593).

Sell orders: N/A (Predicative stop-loss orders seen at: N/A).

GBP/USD:

Weekly Timeframe: The weekly timeframe shows that the sellers have brought price back down to a weekly demand area seen at 1.58533-1.60157. At the time of writing, things do not seem to be looking too good for the buyers at the moment.

Daily Timeframe: The daily supply area at 1.61255-1.60498 has been well and truly consumed, and as a consequence this has likely cleared the path north up to a daily decision-point supply area seen at 1.62860-1.62109. However, before price hits this area, there is a strong possibility that we could see a retracement back down towards daily demand at 1.58533-1.59914 (located deep within the aforementioned weekly demand area), which is where price just came from.

4hr Timeframe: The 4hr timeframe shows that the combined 4hr demand/round number area at 1.60789-1.61071/1.61 has been consumed. The market then found the 1.60102 level supportive enough to allow the buyers to retest the aforementioned combined 4hr area as supply, where at the time of writing, active selling seems to be present.

Assuming that further selling is seen from here, price will likely test the 1.6 level (active buy orders are seen just above at 1.60055), which could very well see a reaction. Be that as it may, in the event that this level is broken, there could be a nice retest opportunity to sell, where one could target the 4hr demand area seen below at 1.58533-1.58915 (located deep within both the weekly and daily demand areas [1.58533-1.60157/1.58533-1.59914]). The reason we believe prices could drop this far is simply due to the demand consumption tail seen marked with a blue arrow at 1.59398.

Buy/sell levels:

Buy orders: 1.60055 (Predicative stop-loss orders seen at: 1.59794).

Sell orders: N/A (Predicative stop-loss orders seen at: N/A).

AUD/USD:

Weekly Timeframe: Once again, buying weakness is being shown within the weakly demand area coming in at 0.86591-0.88247. As per this timeframe, it really does not look good for anyone that is buying at the moment.

Daily Timeframe: The daily timeframe is currently showing indecision, as price is seen trading between a daily demand area at 0.86183-0.87183, and a daily decision-point supply area coming in at 0.88961-0.88302. In our opinion, there is no clear direction on this timeframe until either one of these areas sees a break. Therefore, going long within the aforementioned weekly demand area may not be the best path to take until the daily decision-point supply area mentioned above is consumed.

4hr Timeframe: The AUS/USD has not seen much movement since the last analysis, and in our opinion looks a right messy pair to trade at the moment. Price remains consolidating between a 4hr supply area seen at 0.88591-0.88275 (tentative sell orders are seen just below at 0.88250), and a combined 4hr demand/round number area at 0.86744-0.87235/0.87 (tentative buy orders are seen just above at 0.87297).

There are very likely opportunities to trade the extremes of this range; however, we would only do so with corresponding lower-timeframe confirmation.

USD/JPY:

Weekly Timeframe: Last week saw the market react beautifully off of a weekly resistance flip level coming in at 105.432. Is this level really enough to put a halt on the selling that was recently seen out of the weekly supply area above at 110.625-108.123? Let’s see what the lower timeframes have to say about this.

Daily Timeframe: The daily timeframe shows that price is still currently trading within a fresh daily decision-point supply area seen at 107.486-106.661. Assuming further selling comes into the market here, lower prices may be possible down to at least a daily decision-point demand area coming in at 104.674-105.244, where a decision will once again have to be made. However, in the event price breaks above this area, any traders that are short around the aforementioned weekly supply area may want to consider closing some or all of their position, since price could possibly trade right back to your entry level.

4hr Timeframe: Technically, not much has changed, and as a result much of our previous analysis remains valid:

The 4hr timeframe now shows price is currently trading between a 4hr supply area seen at 107.486-107.035 (deep within the daily decision-point supply mentioned above at 107.486-106.661), and a 4hr demand area coming in at 106.125-106.484 (tentative buy orders are seen just above at 106.517).

In the event that price breaks above the aforementioned 4hr supply area, this will likely do two things, one, clear the path north up to around the 108 level, and two, consume the aforementioned daily decision-point supply area. Be that as it may, if price decides to turn south here, and break below the aforementioned 4hr demand area, price would then have to almost immediately contend with near-term support around the 106 level, not a great start for anyone looking to trade the breakout!

There are very likely opportunities to trade between the aforementioned 4hr supply, and 4hr demand area. That being said though, we would only do so with corresponding lower-timeframe confirmation.

EUR/GBP:

Weekly Timeframe: Price is once again seen trading around a huge weekly demand area coming in at 0.76931-0.78623. We have to be honest here, considering only the weekly timeframe for a minute; we would be very worried if we were buyers, as this demand area is not exactly showing any bullish strength at the moment.

Daily Timeframe: The daily timeframe shows that price is currently trading within a daily decision-point demand area seen at 0.78468-0.78986. This area is very important in our opinion, so much so that if price breaks below this area, the path south would likely be clear for the sellers to test a daily demand area coming in at 0.77507-0.77772, which is conveniently located very deep within the weekly demand area mentioned above at 0.76931-0.78623.

However, assuming that we get favorable price action on the 4hr timeframe, this would be a perfect area to go long from targeting the daily Quasimodo resistance level at 0.80351. Let’s take a look!

4hr Timeframe: A sharp selloff has been seen from a beautiful-looking 4hr supply area at 0.79409-0.79204. This move consumed both the round-number level 0.79, and also the 4hr support level coming in at 0.78882.

A potential selling opportunity may be forming, which if taken will need to be done so with caution, since we mustn’t forget price is still trading around higher-timeframe demand at the moment (Weekly: 0.76931-0.78623, Daily: 0.78468-0.78986).

With that being said, we see a clear path down to a 4hr demand area at 0.78468-0.78595 (active buy orders are seen just above at 0.78616), which is located deep within the aforementioned higher-timeframe demand areas. However, the big guys may need to fill some of their unfilled sell orders before being able to move price down that far. The most logical area would be the 0.78882 level, but with the round number 0.79 looming just above, it opens the possibility for a fakeout to ensue. Take a look on the hourly chart, there is a beautiful 1hr decision-point supply area seen at 0.79018-0.78944, this is where we believe a reaction will likely be seen (active sell orders seen just below at 0.78928), and if we target the aforementioned 4hr demand area, this could turn out to be a very rewarding trade.

Buy/sell levels:

Buy orders: 0.78616 (Predicative stop-loss orders seen at: 0.78444).

Sell orders: 0.78928 (Predicative stop-loss orders seen at: 0.79065).

USD/CAD:

Weekly Timeframe: Last week shows that the buyers were unable to close above the 1.12775 high. Be that as it may, we still feel that the majority of sellers here were well and truly consumed with that humongous wick coming in at 1.13842, and as a result there is a good chance higher prices could still be seen.

Daily Timeframe: The daily timeframe shows that even though price was unable to close above the 1.12775 high on the weekly timeframe, it certainly did on the daily timeframe, which in our view indicates buying strength. At the time of writing, price is trading around a daily decision-point demand area seen at 1.10807-1.11719. Assuming bullish price action is seen on the 4hr timeframe, this could be a fantastic place to go long. However, in the event that this area is consumed, we can likely assume higher prices will not be seen just yet!

4hr Timeframe: Price is currently seen consolidating on the 4hr timeframe between a combined 4hr demand/round number area at 1.11837-1.12186/1.12 (located just within the daily decision-point demand area mentioned above at 1.10807-1.11719), and a small 4hr supply area coming in at 1.12953-1.12813. Ideally, what we would like to see here is a push above both the small 4hr supply area, and the 1.13 level. This would in our opinion clear the path north up to around the 1.14 level, and at the same time likely imply buying strength from the aforementioned daily decision-point demand area. Why have we not included the 4hr supply area at 1.13842-1.13352? The answer is simply because this area has already likely been weakened by the touch seen on the 16/10/14 at 1.13601.

Assuming the above takes place, where could one buy into this action? If the 1.13 sees a positive close above, you could attempt to trade the retest with a small stop targeting the 1.14 level. However, as price action develops there will likely fresh demand areas forming, which one could also trade.

Buy/sell levels:

Buy orders: N/A (Predicative stop-loss orders seen at: N/A).

Sell orders: N/A (Predicative stop-loss orders seen at: N/A).

USD/CHF:

Weekly Timeframe: Last week saw selling interest coming into the market around a weekly supply area at 0.98378-0.95895. That being said though, active buying was also seen around the 0.93589 level, which forced price to close above a weekly resistance flip level coming in at 0.94546. This level currently appears to be fuelling further buying at the time of writing; this is certainly not a good sign for any sellers at the moment!

Daily Timeframe: The daily timeframe shows that price action is currently confined to trading between a daily supply area at 0.95613-0.94675, and a daily decision-point demand area seen at 0.93522-0.93970. It is only until one of these areas sees a break, will we then likely have some idea regarding future direction.

4hr Timeframe: The 4hr timeframe shows that price broke above 0.95, and is now seen trading within a fresh 4hr supply area coming in at 0.95613-0.95298. Assuming active sellers come into the market here, this could force price down to test the 0.95 level, or even the 4hr demand area just below it at 0.94713-0.94955.

On the other hand, a break above the 4hr supply area could be disastrous for anyone selling this market, since other than the 0.96 level, all visible supply to the left has already likely been consumed (take note of the supply consumption wicks seen at 0.95613/0.95917/0.95996/0.96236). If price does break above this 4hr supply area without hitting the 0.96 level, a potential medium-term buying opportunity would likely present itself at the aforementioned 4hr demand area (active buy orders are seen just above at 0.94995) if price retraced that far. The risk to reward on that trade would be fantastic even only with targeting only the 0.96 level!

Buy/sell levels:

Buy orders: 0.94995 (Predicative stop-loss orders seen at: 0.94690).

Sell orders: N/A (Predicative stop-loss orders seen at: N/A).

XAU/USD (GOLD):

Weekly Timeframe: Gold is currently seeing selling interest around a weekly support flip level coming in at 1244.08. Assuming further selling is seen, it is likely that price could trade back down towards a weekly demand area at 1156.70-1195.45.

Daily Timeframe: The daily timeframe shows that price is very near to hitting a daily resistance flip level seen at 1235.54. This level held price beautifully before, so there will likely be a tug of war seen here between the buyers and sellers. It will be interesting to see what the 4hr timeframe has to say.

4hr Timeframe: The 4hr timeframe shows that for the sellers to overcome the buyers around the aforementioned daily resistance flip level, they will have to overcome a small 4hr fresh demand area coming in at 1234.50-1237.93 (active buy orders are seen just above at 1238.32). Assuming buying interest does come into the market here, we’ll have to watch this trade carefully, and have set take profit areas, since we mustn’t forget that price is currently reacting to a weekly support flip level mentioned above at 1244.08.

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